Sometimes a home will be sold prior to MLS submission, this is known as sold before processing. This can be a tricky situation – especially if the listing agent is representing the buyer and seller. The lack of real estate listings in premier Los Angeles neighborhoods, such as La Canada, Glendale, La Crescenta, Burbank and Pasadena has home buyers and Realtors in a feeding frenzy. I recently listed a La Crescenta home which is a probate sale (the owner is deceased). As most sellers tend to do in this crazy real estate environment, we started preparing the home for sale. We hired a gardener to get the lawn in shape. Then arranged to have the interior painted and the outdated exterior peach trim repainted.
We took action by placing a For Sale sign and adding a Coming Soon sign rider, and the result was a constant stream of phone calls. Almost every real estate agent in town had a buyer eagerly searching for a La Crescenta home. While we preferred to avoid frequent visits during the painting process, one resourceful real estate agent from a different brokerage managed to gain access. The buyers represented by this agent submitted a non-contingent offer.
This particular La Crescenta home buyer took the bold step of waiving several contingencies. Firstly, they waived the loan contingency. If you have obtained prequalification from a reputable lender, this poses minimal risk. Additionally, they waived the appraisal contingency, which would require an increase in their down payment if the appraisal came in low. However, their most significant commitment was waiving the investigative contingency, which pertains to the home inspection. Once the buyer’s earnest money deposit entered escrow, it became at risk if they failed to close (due to the non-contingent offer).
It’s much easier for a Realtor to advise a home seller how much to list for than at which price the home will sell. Many homes in the Los Angeles Foothills and San Fernando and San Gabriel Valley are selling 5-10% over the asking price. So why did the executor accept this offer when I told him, he might likely sell for more?
- We didn’t have to continue sprucing up the home and saved a few dollars here.
- We didn’t need to wait until the work was done, and then send a professional photographer and then get listed in the MLS. We sped up the timeline by about a month.
- The home needs updating; there could be plumbing, electrical or other issues which would become known during an inspection (remember the buyer waived this contingency).
- When a homeowner dies without a trust, the process can be lengthy and involved. The executor was tired of the process; he simply wanted to get on with his life by expediting a faster sale.
Buyer takeaway:
- If your Realtor isn’t out there every day searching for your home, fire them and find another real estate agent. Read the Top Ten Reasons You Should Fire Your Realtor
- Your Realtor should be local with good relations within the Realtor community. If you choose to work with an annoying or slacker Realtor, don’t be surprised if your offer gets passed by.
- The seller (in my situation the executor) calls the shots. I had a marketing plan. I knew when we would be live in the MLS and when I was going to hold the home open. But as soon as this offer arrived it was my fiduciary duty to present to the executor. Just because the listing agent has a plan doesn’t mean it can’t or won’t vary. This agent took the time to write an excellent offer – an offer the seller didn’t want to refuse. The real estate agents and buyers waiting for the open house and my timeline sadly missed the boat because the seller had other plans.
